BANKING & FINANCE LITIGATION UPDATE - DLA Piper
Transcript of BANKING & FINANCE LITIGATION UPDATE - DLA Piper
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CONTENTS
Domestic Banking 2
Domestic General 4
European Banking 5
European General 6
International Banking 6
International General 7
Press Releases 8
BANKING & FINANCE LITIGATION UPDATE
ISSUE 76
2 | Issue 76 - Banking & Finance Litigation Update
DOMESTIC BANKING
BANK OF ENGLAND
1. The Monetary Policy Committee of the Bank of
England has decided to hold interest rates at the
record low of 0.5 per cent, where they have been
held since March 2009. The Bank's emergency
stimulus of £375 billion has also been left at the
same level.
Telegraph.co.uk, 8 May 2014
2. The Organisation for Economic Cooperation and
Development (OECD) has called on the Bank of
England to "address the risks of excessive house
price inflation" by tightening up access to the
Help to Buy scheme.
Independent.co.uk, 7 May 2014
3. Growth forecasts for the UK have been upgraded
by the Bank of England for the second time in two
months, with confidence in manufacturing now
higher than it has been for forty years. The
forecast for growth in the first three months of the
year rose from 0.9 per cent to 1 per cent.
Telegraph.co.uk, 23 April 2014
BARCLAYS
4. A major overhaul of Barclays Bank is underway
after the bank's chief executive, Antony Jenkins,
announced that 19,000 jobs will be lost. 7,000 of
the job losses will come from the company's
investment banking arm, which Jenkins is
determined to scale back to avoid further rows
about bonus increases. Barclays will also create
an internal "bad bank" to house undesirable parts
of the investment operations as well as some of its
operations in Europe.
Guardian, 9 May 2014
5. Barclays has issued its financial results which
show a reduction in overall group profits from
£1.8 billion to £1.7 billion, whilst turnover fell to
£6.1 billion, a drop of 13 per cent. Investment
banking was the heaviest to be hit, where profits
were down by almost half to £668 million for the
first quarter of 2014.
Guardian, 9 May 2014
6. Barclays is to provide a £1 million package of
assistance to the financial co-operative sector,
which includes credit unions, and which acts as an
alternative to pay day lenders and loan sharks.
Barclays has said it will allow credit unions to use
its branches to operate from for free and will also
provide them with access to its mobile payments
technology, Pingit, at no cost.
Guardian.co.uk, 30 April 2014
CO-OPERATIVE BANK
7. The Co-op Bank has completed a £400 million
fundraising with existing shareholders and new
institutional investors agreeing to take shares to
that value. The Co-op Group's holding in the bank
will reduce from 30 per cent to 20 per cent.
Sunday Times, 11 May 2014
8. The publication of Sir Christopher Kelly's 152
page report on the crisis at the Co-operative Bank
has found that poor management, bad lending, a
flawed culture and a merger with the Britannia
Building Society that ought never to have
happened were all a part of the mutual board's
failings. The report identifies nine reasons for the
crisis and fifteen lessons to be learned.
Guardian, 1 May 2014
HSBC
9. HSBC has succumbed to shareholder pressure and
reduced the amount of a "performance" share
award, worth about £2.25 million, it had planned
to give to chairman Douglas Flint. The banking
group informed investors that any payout would
have a limit of £1 million and the head of its
remuneration committee pledged that the bonus
would be a one-off.
Times, 15 May 2014
10. The first three months of 2014 saw HSBC suffer a
20 per cent drop in pre-tax profits, a figure that
reflected the impact in its investment banking
activities of "challenging market conditions".
HSBC's investment banking saw pre-tax profits go
down by a fifth to $2.87 billion, mirroring declines
reported by other European and US investment
banks, mostly as a result of a fall in revenues from
fixed-income trading.
Financial Times, 8 May 2014
LLOYDS BANKING GROUP
11. Plans by Lloyds Banking Group to list its TSB
branches on the London Stock Exchange ahead of
a flotation have been approved by the European
Commission. The Commission's first deadline
for the sale of the 631 branches has been extended
from November 2013 to the end of 2015. The
flotation is expected to take place by the end of
June this year.
Telegraph, 14 May 2014
12. Lloyds Bank has released figures for the first
quarter of 2014 which show an increase of 20 per
cent in underlying profit to £1.8 billion. The bank
has also announced that it intends to float more
than 25 per cent of its TSB business before the
end of June this year and will allow retail
investors to purchase shares through
intermediaries. It also hopes that its results will
let it restart the payment of dividends to investors.
Financial Times, 2 May 2014
THE ROYAL BANK OF SCOTLAND
13. Citizens Financial Group has filed documents with
the US Securities and Exchange Commission for
an initial public offering which would raise in the
region of $100 million for The Royal Bank of
Scotland ("RBS"). A listing by RBS's American
business, which is reckoned to be worth
approximately $15 billion, will facilitate the
restoration of billions of dollars of capital to the
UK.
Telegraph, 13 May 2014
14. Profits at RBS doubled in the first quarter of 2014
aided by decreasing bad loan impairments and the
first profit since the financial crisis for its Irish
business, Ulster Bank. The lender reported a pre-
tax profit of £1.64 billion compared with £826
million in the same period in 2013. Chief
executive Ross McEwan said there is still much
work to be done and lots of issues from the past to
consider.
Telegraph.co.uk 2 May 2014
15. The chairman of SME banking for RBS and
NatWest has maintained that the two banks, who
announced they have been in touch with over
270,000 firms offering to lend them a total of
more than £10 billion, are "very much open for
business".
Times, 5 May 2014
16. Further institutional investors have joined a legal
action against RBS over its 2008 £12 billion rights
issue only months before it collapsed and had to
be bailed out.
Times, 2 May 2014
17. RBS has cautioned that if Scotland votes for
independence, the whole of RBS's business would
be affected, resulting in greater costs and poorer
credit ratings. RBS has previously warned it might
have to relocate its legal headquarters and some of
its operations to England in the event of
independence.
Thetimes.co.uk, 26 April 2014
18. RBS's proposal to hand out bonuses to top bankers
worth up to twice their salaries has been thwarted
by the Treasury and the lender has warned of a
"commercial and prudential risk" to its business as
a result. RBS said key senior employees would
likely leave for competitor banks able to give out
larger pay packages.
Telegraph, 26 April 2014
19. RBS has been fined HK$6 million by Hong Kong
regulators for inadequate controls which allowed
Shirlina Tsang Pui Yu to lose £24.4 million. The
rogue trader was found guilty of fraud, which
RBS had reported to the Securities and Futures
Commission of Hong Kong, and was jailed in
2013.
Times, 23 April 2014
20. A Clifford Chance report commissioned by RBS
has exonerated the lender over allegations made
last November by Lawrence Tomlinson that it had
purposely put small business customers in
financial strife out of business for its own gain.
The law firm found "no evidence" of misconduct
by the lender and said its investigation of RBS's
controversial global restructuring group had found
nothing to indicate that SME customers had failed
as a result of the lender's actions.
Telegraph, 18 April 2014
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STANDARD CHARTERED
21. After experiencing a detrimental shareholder
revolt at its annual general meeting in London,
Standard Chartered has promised to reconsider the
way in which it pays its bosses. 41% of
shareholder votes were against the pay policy for
the coming three years.
Guardian, 9 May 2014
22. Although Standard Chartered continues to face
difficult market conditions, its performance for the
first quarter of 2014 is in keeping with
expectations. The lender's operating profits fell by
a "high single digit percentage".
Telegraph.co.uk, 8 May 2014
DOMESTIC GENERAL
23. Research from the London School of Economics
shows that the UK's largest four banks have set
aside £21.5 billion in advance of more fines and
payments to customers for previous bad
behaviour. This amount is in addition to almost
£25 billion in costs already paid out by the banks.
Guardian, 14 May 2014
24. Less than a quarter of the compensation owed to
small businesses by banks over mis-sold interest
rate swaps, has so far been paid. The Financial
Conduct Authority ("FCA") scheme is unlikely to
make its target of securing compensation of £3.75
billion by the end of July.
Times, 9 May 2014
25. In the first of a number of flotations by so-called
"challenger banks" looking to raise money and
provide competition for established lenders on the
high-street, OneSavings Bank has announced that
it intends to list on the London Stock Exchange in
June and raise £41 million.
Financial Times, 8 May 2014
26. Regulators have been subject to criticism about
the way that the penalty process is currently
handled. The Treasury is consulting over changes
to the current regulatory regime which could
result in a new body being created to oversee
fining and banning decisions.
Telegraph, 7 May 2014
27. Despite an insistence from banks that they are
ready to provide companies with the money they
need, lending to small and medium-sized
businesses has dropped by the biggest amount in
over a year. After a £200 million rise in February,
net lending to SMEs was down by £1.1 billion in
March. The drop came despite efforts by the Bank
of England and the government to improve the
situation, such as a refocusing of the Funding for
Lending scheme. Net lending to the wider
corporate world also fell in March, down by £2.3
billion, the fifth consecutive monthly drop.
Times, 2 May 2014
28. Seven large banks and Nationwide Building
Society are to be tested by the Bank of England to
see if they would have enough capital following a
number of 'doomsday' situations. The scenarios
include an increase in the base rate to 4 per cent,
unemployment soaring to nearly four million, the
pound sinking by 30 per cent and house prices
collapsing by 35 per cent. The stress tests will be
formally applied before the end of 2014, and those
banks which fail the tests might be required to
raise new capital or reduce riskier practices. They
may also have to conserve cash by being forced to
suspend staff bonuses or dividends. The Bank's
Prudential Regulation Authority will conduct the
tests.
Times, 30 April 2014
29. Registrations for Paym, the new mobile-to-mobile
payments system, had reached 360,000 by the
system's launch. Most of the major banks are
backing Paym, though customers at RBS/NatWest
will not be able to use it until later in the year. The
system lets customers make and receive payments
directly to a current account using just a mobile
phone number, and without having to reveal
sensitive account details. By 2018, the Payments
Council expects 1 billion payments to have been
made via Paym.
Guardian.co.uk, 29 April 2014
30. New rules will provide more help to people who
have sent money to the wrong account by accident
and are trying to get it back. Under a voluntary
code, which is being overseen by the Payments
Council, banks or building societies will act within
two working days once they are informed by a
customer that a mistake has been made with a
payment. If the funds cannot be reclaimed
immediately, further investigations will be made
and the customer informed of the outcome within
20 working days.
Telegraph, 26 April 2014
31. As the authorities increase their assessment of the
country's ability to withstand cyber-crime and
terrorism, top financial institutions in the UK are
to be subjected to simulated attacks on their
computer infrastructure. The unprecedented
programme of "ethical hacking" is being overseen
partly by the Bank of England. The scenarios used
by the testers will draw on information from
intelligence reports on hacker threats from
criminals, rogue states and terrorists.
Financial Times, 22 April 2014
32. Consumer group Which? has warned that bad
advice from bank staff on a financial
compensation scheme risks losing savers
thousands of pounds. Which? found that bank staff
"routinely" gave wrong information on the
Financial Services Compensation Scheme, which
is designed to compensate savers in the event that
their building society or bank goes bust. Not one
member of staff at the 13 providers who were
tested mentioned that only £85,000 of the
£100,000 being put forward for depositing would
be protected in the event of a collapse of the
building society or bank.
Telegraph, 19 April 2014
33. A major change for high street banking could be
on the cards, following news that 29 companies
have now applied for banking licences, up on the
total of 21 in autumn 2013. Applications for three
would-be new banks are being considered by the
FCA, with 26 more planning to apply. The FCA
has not provided details about who has applied and
how long the process might take.
Times, 19 April 2014
EUROPEAN BANKING
CREDIT SUISSE
34. The finance director of Credit Suisse has
announced that nothing "materially untoward" has
been discovered in the Swiss lender's investigation
into foreign-exchange trading.
Financial Times, 24 April 2014
DEUTSCHE BANK
35. Investors are putting pressure on Deutsche Bank to
raise capital amid concerns over the bank's ability
to cope with a slump in global debt markets and a
tougher regulatory environment. When the
European Central Bank ("ECB") takes over as
regulator in November, Deutsche is expected to
face a stricter regime of oversight. Insiders at the
bank accept the strong likelihood that, following
Eurozone-wide bank health checks later in 2014,
the bank will be directed to raise fresh equity.
Financial Times, 24 April 2014
EUROPEAN CENTRAL BANK
36. As the ECB kept its benchmark interest rate at a
record low of 0.25 per cent for another month, its
president Mario Draghi signalled that the central
bank will loosen monetary policy in June in order
to fight the persistently low inflation in the
Eurozone.
Financial Times, 9 May 2014
37. Mario Draghi has backed plans for the publication
of non-attributed minutes of ECB governing
council meetings. The move would put the ECB
more in line with its counterparts in the UK, US
and Japan.
Financial Times, 25 April 2014
38. Warning of the increasing risks posed by a
strengthening euro, Mario Draghi has given a
strong hint that the central bank is ready to begin
quantitative easing.
Times, 25 April 2014
SANTANDER
39. Research indicates that more discontented current
account customers are selecting Spanish-owned
Santander as a new home for their everyday
banking than any other provider.
Sunday Telegraph, 11 May 2014
40. For the first quarter of 2014, Santander UK
reported a leap of 48 per cent in pre-tax profits to
£416 million as revenues rose 13 per cent to £1.1
billion. One-off costs, like making provisions for
the cost of redress for insurance mis-selling, have
also been lowered by the Spanish-owned lender.
Chief executive Ana Botín said the lender has
granted £5.7 billion of mortgages to households,
which includes £62 million as part of the help to
buy initiative and £1 billion to those buying for the
first time.
Times, 30 April 2014
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UBS
41. UBS has announced that it intends to split its
Swiss retail and private banking divisions from its
British business, in a move that will make it easier
to break the bank up. The split will also mean that
if another crisis affects the foreign side of the
business, the Swiss regulators could refuse to bail
it out, letting that side of the business fail or
leaving any bail out to the UK government. With
regulators requiring the bank to hold a lower
amount of capital against the risk of failure
following a split, UBS will be able to pay a special
dividend of SwFr 0.25 a share. The first quarter of
2014 saw revenues at the bank remain flat at SwFr
1.9 billion, with pre-tax profits falling to SwFr 659
million from SwFr 690 million.
Times, 7 May 2014
EUROPEAN GENERAL
42. According to a study by rating agency Fitch, even
though investors are lining up to lend them money,
a majority of Europe's banks have suffered an
increase in bad loans. Compared with 2012, there
was an 8.1 per cent increase in impaired loan
volumes in 2013, to just over €1 trillion.
Financial Times, 14 May 2014
43. With investors using billions to chase the smaller
volumes of bonds being issued, Europe's financial
institutions have seen funding costs fall to pre-
eurozone crisis lows. According to the iTraxx
senior financials index, which measures the cost of
bond insurance, the past three months have seen
borrowing costs for banks and insurers reduce by
almost a fifth.
Financial Times, 8 May 2014
44. In one of the most significant breakthroughs in
global attempts to crackdown on tax evasion,
Switzerland has undertaken to hand over the
details of foreign accounts to other countries. The
agreement by Switzerland to sign up to a new
global standard on automatic information
exchange came at a meeting of European finance
ministers.
Financial Times, 7 May 2014
45. Ten member states have agreed to implement a
levy on financial transactions by 1 January 2016,
moving the European Union closer to a financial
transactions tax. This has annoyed UK chancellor
George Osborne, who has threatened to bring a
new legal challenge.
Guardian, 7 May 2014
46. The European Banking Authority has published
details of the financial and economic shocks that
lenders in Europe must prove they can weather in
upcoming sector health checks. Under the tests,
lenders in the EU will need to be able to withstand
a rise in funding costs, a new recession, a global
debt markets sell-off and sharp falls in equity and
property prices. The tests apply across all 28
member states, but are a key part of a
Comprehensive Asessment of banks in the
Eurozone, which is being undertaken by the ECB
as it gets ready to take on supervisory duties in late
2014.
Financial Times, 30 April 2014
47. Caixabank and Sabadell, two big Spanish lenders,
have both reported fewer bad debts in the first
quarter of 2014, indicating the beginnings of a
turnaround in the country's banking sector
following the damage caused by the financial
crisis. The loan data presents some of the clearest
signs yet that the turnaround in the Spanish
economy is starting to reach banks and borrowers.
Guardian, 25 April 2014
INTERNATIONAL BANKING
BANK OF AMERICA
48. Bank of America (BoA) shareholders have voted
all 15 nominated directors onto the bank's board at
the annual shareholders meeting, as well as
supporting the bank's auditors PWC. The votes
came after the discovery of an accounting mistake
which forced BoA to suspend its dividend and
despite calls from investors to vote against
directors with responsibility for auditing and not to
support PWC.
FT.com, 7 May 2014
49. The discovery of an accounting mistake has forced
BoA to suspend its first dividend increase for
seven years and shelve its planned $4 billion share
buy-back programme. The error concerned the
treatment of structured notes issued by Merrill
Lynch, which BoA purchased during the financial
crash in 2008. The Bank will now have to amend
and redo its stress tests for the Federal Reserve.
Financial Times, 29 April 2014
50. Bruce Thompson, the chief financial officer at
BoA, has announced a surprise net loss of $541
million for the first quarter of 2014, down from a
profit of $1.1 billion at the same time in 2013.
The loss comes as a result of the bank setting aside
$6 billion to cover legal costs it expects to incur in
the future.
Telegraph, 17 April 2014
BANK OF CHINA
51. Bank of China, the fourth largest bank in China,
has been ranked in the top ten in the Forbes list of
the world's largest public companies. The other
three Chinese banks, Industrial and Commercial
Bank of China, China Construction Bank and
Agricultural Bank of China, were the top three
largest companies in the world.
Thetimes.co.uk, 8 May 2014
GOLDMAN SACHS
52. Wall Street banking giant Goldman Sachs has
posted an 11 per cent drop in its first quarter
profits. Declines in the bank's fixed-income
trading revenue depressed the results. Net income
for the quarter fell to $1.95 billion, down from
$2.19 billion in the same period in 2013. There
was an 8 per cent fall in revenue to $9.33 billion,
though this was better than estimates of $8.70
billion.
Independent.co.uk, 18 April 2014
MORGAN STANLEY
53. US investment banking giant Morgan Stanley is to
make a new push into consumer banking. The
bank's efforts will be directed at lending to
existing brokerage clients, especially loans and
mortgages secured against customers' portfolios of
bonds and stocks, though other products have also
been examined as part of the banking shift. Chief
executive James Gorman said that retail banking
had become so important that publishing separate
results had been explored by executives, though
the idea has been rejected for the time being.
Officials at the bank have been looking for ways
to lend more and offer new deposit products to
retail customers.
Financial Times, 30 April 2014
54. In a sign that its strategy of focusing on wealth
management is paying off, Morgan Stanley has
defied the recent banking slowdown and posted a
55 per cent increase in profits for the first quarter
of 2014. The period saw the bank make $1.49
billion (£886 million), with revenues up 3.8 per
cent to $8.8 billion, with its wealth management
unit contributing $3.6 billion of that. Morgan
Stanley is the only Wall Street bank to have seen
its fixed-income trading unit grow, with a revenue
increase of 8 per cent.
Telegraph, 18 April 2014
INTERNATIONAL GENERAL
55. In response to moves by regulators to set tougher
requirements on risks linked to interest-rate
movements, banks are preparing for a fight over
capital requirements. The initiative from the
standard-setting Basel Committee has been called
"the final frontier" in bank capital rules by one
consultant. If regulators can reach an agreement on
more demanding global standards, consultants
believe that some banks may be forced to
accumulate extra capital. Lobbyists have
complained that new requirements could see an
approach to interest rate risk that is "one size fits
all", which would not acknowledge the varied
business models pursued by banks.
Financial Times, 12 May 2014
56. One of the US Federal Reserve's policymakers has
said that, despite indications that the recovery of
the US economy might be slowing, it is likely that
the Fed will carry on tapering its multi-billion
dollar bond-buying programme at a similar pace.
Hawkish Fed member Richard Fisher said that the
Fed was still on course to tail off its stimulus by
the end of 2014.
Telegraph, 5 May 2014
57. With rapidly growing commercial ties between
China and Southeast Asia driving increasing use
of China's currency, Singapore has overtaken
London as the biggest offshore trading hub outside
Hong Kong for the renminbi. The change shows
the renminbi's swift internationalisation, as well as
the competition between financial centres in Asia
and Europe for a cut of the business.
Financial Times, 29 April 2014
8 | Issue 76 - Banking & Finance Litigation Update
58. Prosecutors from the US Department of Justice
have flown to London to question individuals as
part of an investigation onto foreign exchange rate
fixing. A number of UK-based currency traders
"on the periphery" of the investigation have been
invited by the Department of Justice to attend
interview in London, as opposed to the United
States. The UK financial regulator has also asked
to be present at the interviews, the first set of
which have already taken place, with further
interviews planned.
Financial Times, 28 April 2014
59. Should the ECB decide to cut key interest rates
below zero, the Bank of New York Mellon could
move to charge clients for depositing euros.
Financial Times, 23 April 2014
60. The city of Providence, Rhode Island, is suing
dozens of major US banks and others on Wall
Street, over high frequency trading (HFT). The
city claims that manipulation of market data in
favour of split-second stock-trading firms by
banks, exchanges and others, defrauded investors.
Telegraph, 21 April 2014
PRESS RELEASES
61. Forbes appointed by the Chancellor as external
member of the Monetary Policy Committee
The Chancellor has announced that Kristin Forbes
has been appointed as external member of the
Monetary Policy Committee (MPC). The
appointment will take effect in July, with Dr
Forbes attending the MPC meeting on 7 July. The
appointment will initially be for a 3 year term. Dr
Forbes will replace Ben Broadbent, who was
appointed as Deputy Governor for Monetary
Policy in March. Ben will continue to serve as a
member of the MPC by virtue of his new position
HM Treasury, 15 May 2014 https://www.gov.uk/government/news/kristin-forbes-
appointed-by-the-chancellor-as-external-member-of-the-
monetary-policy-committee
62. Ending Too Big to Fail – progress to date and
remaining issues - speech by Sir Jon Cunliffe
In a speech on Tuesday 13 May, Jon Cunliffe
reviewed the progress made by regulators in
addressing the issue of Too Big To Fail and set
out some remaining issues. He described the two-
pronged approach taken by regulators: first, to
reduce, but not eliminate, the probability of failure
by increasing the resilience of financial
institutions; second, managing the impact of
failure via the resolution framework and by
making investors bear losses.
Bank of England, 15 May 2014
http://www.bankofengland.co.uk/publications/Pages/
news/2014/076.aspx
63. Bank of England maintains Bank Rate at 0.5%
and the size of the Asset Purchase Programme
at £375 billion
The Bank of England’s Monetary Policy
Committee has voted to maintain Bank Rate at 0.5
per cent. The Committee also voted to maintain
the stock of purchased assets financed by the
issuance of central bank reserves at £375 billion.
Bank of England, 8 May 2014
http://www.bankofengland.co.uk//publications/Pages/
news/2014/005.aspx
64. Bank of England Houblon £50 banknote to be
withdrawn on 30 April
The £50 banknote carrying the portrait of Sir John
Houblon, the first Governor of the Bank of
England, is to be withdrawn from circulation on
30 April. This withdrawal was first announced on
16 January 2014. From the end of 29 April only
the £50 note featuring Matthew Boulton and
James Watt, introduced in November 2011, will
hold legal tender status.
Bank of England, 29 April 2014
http://www.bankofengland.co.uk/publications/Pages/
news/2014/072.aspx
65. Bank of England publishes details of UK stress
test for major UK banks and building societies
In March 2013, the Financial Policy Committee
recommended that regular stress testing of the UK
banking system should be developed to assess the
system’s capital adequacy. In a Discussion Paper
published in October 2013, the Bank of England
set out proposals for the main features of a
framework for annual and concurrent stress-
testing of the UK banking system. The Bank of
England has set out further details of the scenario
for the stress tests that the eight major UK banks
and building societies will be undertaking this
year. This is a step towards the medium-term
stress testing framework outlined in the
Discussion Paper.
Bank of England, 29 April 2014
http://www.bankofengland.co.uk/publications/Pages/
news/2014/071.aspx
66. EBA publishes common methodology and
scenario for 2014 EU-banks stress test
The European Banking Authority has released its
methodology and macroeconomic scenarios for
the 2014 EU-wide stress test. While the extensive
process of banks' balance sheet repair is already
underway, the test, designed to assess banks'
resilience to hypothetical external shocks, will
identify remaining vulnerabilities in the EU
banking sector and will provide a high level of
transparency into EU banks' exposures.
European Banking Authority, 29 April 2014
http://www.eba.europa.eu/-/eba-publishes-common-
methodology-and-scenario-for-2014-eu-banks-stress-test
67. New mortgage rules come into force
New rules from the FCA have come into force
which will put common sense at the heart of the
mortgage market and prevent borrowers ending up
with a mortgage they cannot afford.
Financial Conduct Authority, 25 April 2014
http://www.fca.org.uk/news/press-releases/new-mortgage
-rules-come-into-force
Bank of England Houblon £50 banknote to be
withdrawn on 30 April
The £50 banknote carrying the portrait of Sir John
Houblon, the first Governor of the Bank of
England, is to be withdrawn from circulation on
30 April. This withdrawal was first announced on
16 January 2014. From the end of 29 April only
the £50 note featuring Matthew Boulton and
James Watt, introduced in November 2011, will
hold legal tender status.
Bank of England, 29 April 2014
http://www.bankofengland.co.uk/publications/Pages/
news/2014/072.aspx
66. Bank of England publishes details of UK stress
test for major UK banks and building societies
In March 2013, the Financial Policy Committee
recommended that regular stress testing of the UK
banking system should be developed to assess the
system’s capital adequacy. In a Discussion Paper
published in October 2013, the Bank of England
set out proposals for the main features of a
framework for annual and concurrent stress-
testing of the UK banking system. The Bank of
England has set out further details of the scenario
for the stress tests that the eight major UK banks
and building societies will be undertaking this
year. This is a step towards the medium-term
stress testing framework outlined in the
Discussion Paper.
Bank of England, 29 April 2014
http://www.bankofengland.co.uk/publications/Pages/
news/2014/071.aspx
67. EBA publishes common methodology and
scenario for 2014 EU-banks stress test
The European Banking Authority has released its
methodology and macroeconomic scenarios for
the 2014 EU-wide stress test. While the extensive
process of banks' balance sheet repair is already
underway, the test, designed to assess banks'
resilience to hypothetical external shocks, will
identify remaining vulnerabilities in the EU
banking sector and will provide a high level of
transparency into EU banks' exposures.
European Banking Authority, 29 April 2014
http://www.eba.europa.eu/-/eba-publishes-common-
methodology-and-scenario-for-2014-eu-banks-stress-test
68. New mortgage rules come into force
New rules from the FCA have come into force
which will put common sense at the heart of the
mortgage market and prevent borrowers ending up
with a mortgage they cannot afford.
Financial Conduct Authority, 25 April 2014
http://www.fca.org.uk/news/press-releases/new-mortgage
-rules-come-into-force
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